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Shattered Georgia pays high price for peace

Charles Bremner, Tony Halpin and Tim Reid; London Times
A victorious Kremlin agreed to a ceasefire in the Caucasus last night on terms that left Georgia and its Western backers weakened.

After five days of fighting, President Medvedev of Russia ordered his troops in South Ossetia to hold their fire and fixed a six-point peace plan with President Sarkozy of France
(13 August 2008)

A Roadblock to Russian Oil and Gas

Steve LeVine, Business Week
The Russian assault on Georgia has injected a specter of doubt into a U.S.-backed oil and natural gas route that had until now seemed safer than almost any other on which the West relies, analysts say.

Washington has spent more than a decade of diplomacy and arm-twisting to erect what it calls an East-West Energy Corridor connecting the countries of the Caspian Sea with NATO ally Turkey. The result has been a network of oil and natural gas pipelines, ports, and tankers that can feed a million barrels a day to the world market. Washington has sought to expand and link that network directly to Europe, where Russia is currently the dominant supplier.

But Russia’s vigorous assault on Georgia—a key stretch of the energy route—has made the strategy seem less reliable, analysts say. Black Sea oil tankers that normally would be filling up with Baku crude, for example, were reported on Aug. 11 to be anchoring 15 miles offshore from the Georgian port of Batumi, where there was a rumor of a bombing by Russia.
(11 August 2008)

Oil and the war in Georgia

Kjell Aleklett, Aleklett’s Energy Mix (blog)
It was in Baku that the Nobel brothers’ oil adventure began in the 1800s and Baku is once again on the way to being an important turning point in the history of oil.

The nations around the Caspian Sea have large reserves of oil and gas but the problem has always been to find a suitable export route. The Soviet Union tried to open an export route via Afghanistan and many years of conflict and war resulted. It was mainly the oil in Kazakhstan that was to be exported via this route.

When the Soviet Union collapsed, it became possible for the international oil companies to enter and exploit some of the oil-bearing geological layers in and around the Caspian Sea. In 2000 the giant field Kashagan was discovered in Kazakhstan. It is thought that this field contains 12 billion barrels of oil.

It has taken significantly longer than expected to begin production of this oil but it is estimated that maximal production will be 2 million barrels per day in approximately 10 years time. The field will then be the world’s second most productive. The export route that has been chosen is from Baku in Azerbaijan, past Tbilisi in Georgia. Then there are two alternative paths, one that continues through Turkey to the Mediterranean and one that continues through Georgia to the Black Sea. These oil pipelines will be Europe’s future lifelines.

Oil is power. We now see that Georgia is attempting to align itself with the west and the EU and to break itself loose from Russian influence. Russia would then have no control over the oil from the nations around the Caspian Sea.

The armed conflict that is now underway is not directly motivated by oil, but we must understand Georgia’s strategic importance to understand the political game that is being played out.
(11 August 2008)
A follow-up article has been posted in Swedish, and the English translation is on the way. Check at the homepage for Kjell’s blog. Kjell Aleklett is president of ASPO. He is also Professor in Physics at the Department of Physics and Astronomy, Global Energy Systems Group (former Uppsala Hydrocarbon Depletion Study Group) at Uppsala University. -BA

Clash of identities triggered Caucasus crisis

Julia Slater, Swiss Info
… Swiss regional expert Eric Hoesli explains to swissinfo the background to the fighting, in which Georgia attempted to clamp down on its breakaway province of South Ossetia, provoking a strong Russian military reaction in support of the rebels.

… swissinfo: Why should the Ossetians get help from Russia? What is the relationship between them?

Eric Hoesli: The Ossetians have traditionally been faithful allies of the Russians, their great northern neighbour and major market. They have long been linked economically, intellectually and politically with Russia.

swissinfo: What about with Georgia?

E.H.: They have also historically been close to the Georgians. Ossetians controlled the main pass over the Caucasus and they subsequently spread all over the southern flank of the mountains. They have a long history of co-existence with the Georgians.

After the collapse of the Soviet Union the [Ossetian and Abkhaz] minorities found themselves faced with a Georgia thirsting to find its own identity, to demonstrate that Georgia was a single entity, a single people, and single language. At the time of independence Georgia was led by a hardline nationalist leader who simply did away with the autonomous status enjoyed by the minorities during Soviet times and wanted to turn them into ordinary Georgian administrative regions.

So two types of nationalisms came into conflict. On the one hand the perfectly understandable nationalism of the Georgians after they got rid of Soviet tutelage, and on the other the nationalism of the minorities, who are quite unrelated to the Georgians, and who under the system of autonomy could always appeal to Moscow against the Georgians, but who now were suddenly left with nothing.

… swissinfo: What interests does the West have in the region?

E.H.: There are several major things at stake. In the first place Georgia is on the border of Russia and very close to Iran and also has a border with Turkey. For the United States in particular Georgia’s proximity to Russia and Iran makes it an important place.

Then Georgia is in the east-west corridor running alongside Russia, along which energy products can pass without going through Russia. The Europeans have repeatedly proposed making this into a transport corridor too, for both road and rail.
(12 August 2008)
Backgrounder has more shades of gray than is common in the U.S. press. Also see The trouble with Georgia on Energy Bulletin by Dmitry Orlov. -BA

BP shuts Georgia oil, gas pipelines as a precaution

Daniel Fineren, Reuters
BP has closed two oil and gas pipelines running from its Caspian Sea fields through Georgia but neither has been damaged by recent fighting in the country, a spokesman for the British oil major said on Tuesday.

Georgia accused Russia of bombing its fuel lines on Tuesday, allegations denied by Moscow.
(12 August 2008)

Georgia conflict ‘a threat to strategic energy supplies’

AFP via Yahoo!News
Fighting in Georgia threatens a strategic energy hub, the IEA warned on Tuesday, shortly before Georgia said Russia had attacked a pipeline normally carrying up to a million barrels of oil a day westwards.

The International Energy Agency said that events in Georgia had not affected the price of oil, but stressed the significance of the region to energy supplies.
(12 August 2008)

It is largely about oil pipelines

Editorial, Globe and Mail
As Russia’s unnecessary, immoral and illegal military campaign in Georgia grinds onward, the world should not be fooled by President Dmitri Medvedev’s claim that his troops are fighting “to restore peace to South Ossetia.”

The Russian assault has very little to do with Georgian President Mikheil Saakashvili’s ill-advised decision to send troops into that troubled region, and owes much more to Moscow’s determination to control energy supplies in the Caucasus and strengthen its position as a near-monopoly supplier to Europe.

Georgia is a crucial transit point for oil and gas. Three major pipelines connecting energy sources in the Caucasus and Central Asia to European markets pass through its territory. One of these, the South Caucasus pipeline, is an important part of the plan for the Nabucco pipeline to Austria, which would deliver natural gas directly to the European Union, bypassing Russia entirely, if built.

… To suggest that Russia would ignite a regional war for the sake of controlling energy supplies might seem fanciful, were it not for the extraordinary connections between the Kremlin and the energy industry, and the centrality of its operations to Russian policy.
(12 August 2008)

Oil in troubled mountains

Robert M Cutler, Asia Times
The armed conflict between Russian and Georgia has further exposed the fragile position of the energy links running through the smaller country from the Caspian Sea to developed market economies.

Russian forces are placed to disrupt oil flows through the Baku-Tbilisi-Ceyhan (BTC) pipeline, which has carried Caspian Sea oil from Azerbaijan across Georgia to Turkey since 2006, and the Baku-Tbilisi-Erzerum pipeline, which opened last year and exports gas to Turkey, as well as the older Baku-Supsa “early oil” line that runs to the Georgian Black Sea coast.

… The Russian invasion is not about South Ossetia. It is about regime change in Tbilisi, reimposing a 19th-century sphere of influence in the South Caucasus, limiting the autonomy of the countries there, and through all these devices maintaining control of energy transmission lines to the West.

Robert M Cutler is senior research fellow, Institute of European, Russian and Eurasian Studies, Carleton University, Canada.
(13 August 2008)